The dwelling in question is a Townhouse in Boulder County, Colorado
I was the owner of a dwelling in Colorado when a fairly bad hail storm hit this last Summer. I received notice that there would likely be a sizeable special assessment due to the hail damage a week before before going on the market. We went under contract soon after listing. I notified my agent via email about the special assessment the day we went under contract. I told my agent to notify the buyer that I am willing to pay the assessment in full when it gets posted since it would occur after closing.
Fast forward to after closing and I find out that my agent never noticed the two emails I sent regarding the special assessment and took no action on it. I'm still willing to pay the special assessment. However, now I find that the new owner will be charged income tax on my payment to cover the special assessment. I call up the HOA and ask them to bill me instead but they say they cannot do that because we should have formalized an agreement to that effect at closing.
Is there any way I can compensate the buyer without incurring income tax for the buyer at this point? Maybe some way to refund part of the purchase price to offset the assessment cost?